In 2011 San Marino continued to renew its image in the financial world. During her speech to the UN General Assembly, Antonella Mularoni, secretary of state for foreign affairs, underscored the importance of San Marino’s international ties. Both the World Bank and the International Monetary Fund acknowledged the significance of the country’s banking-reform efforts.

It was especially alarming during the year to discover, following investigations by the Italian police, that powerful criminal organizations from Naples were well integrated into San Marino’s financial fabric. Allegedly, these organizations had the capacity to manipulate the country’s political system. Italian Finance Minister Giulio Tremonti noted that the per capita personal savings in San Marino was 20 times greater than that of the Italian savings rate. Such high liquidity could not, he asserted, be attributed to legitimate family savings alone. Evidently such distorted financial conditions were detrimental to the overall economy; during the year 7% of all San Marino companies closed.

One way for San Marino to circumvent this anomalous status would be to attain full membership in the European Union. The country already had many ties with the EU, but a popular initiative was launched in 2011 to mandate a process that could lead to full membership. To some, this step could guarantee future stability, while others held that such a commitment could undermine the tiny state’s unique character.

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small republic situated on the slopes of Mount Titano, on the Adriatic side of central Italy between the Emilia-Romagna and Marche regions and surrounded on all sides by the Republic of Italy. It is the smallest independent state in Europe after Vatican City and Monaco and, until the independence...